The folks at the Daily Labor Report picked up the intermediate California appellate decision of last week, Chopra v. ADVO (CA Ct. App. - 1st Dist. 10/13/04)(unpublished)[pdf] upholding an award of $650,000 for intentional discrimination. The dollar amount didn't qualify it for MDV status, but some of the comments made me think of a speech I have been giving and will be doing again (this time as part of a panel) at the The Labor and Employment Law Advanced Practices Symposium early next month at the fabulous Hotel del Coronado in San Diego:

Why Juries Assess Big Verdicts - And How You Can Avoid Them. The average verdict in employment cases continues to rise, often due to greater punitive damages awards (which are designed to punish the defendant and deter wrongdoing by others). This special presentation will analyze employer conduct that makes juries mad, including harsh terminations, lying, arrogant behavior, and misconduct at trial. Also addressed will be practical tips for minimizing exposure and the role of HR in controlling verdicts.

So I thought I might pick up a useful anecdote for the presentation. Instead what I found was the story of a workplace incident between a supervisor and some of his workers which based solely on the facts relayed in the opinion could easily be argued was mishandled by a supervisor. The result was 5 employees walking off the job, which after further upstairs review led to their termination and a written warning to the supervisor's file which the court concluded was not a form of disciplinary action. What struck me is that the evidence used to uphold the verdict of intentional national origin discrimination was of the type that almost any employer, perhaps particularly an employer mindful of their need to be a non-discriminatory employer might say and do.

First, the comments of some of their HR employees:

Wendy Roe was the [plant]human resources manager at the Newark facility until her employment was terminated in February 2000. Roe had remarked to Williams [regional human resources manager] that some of the temporary employees at the Newark facility who were not from East India were feeling excluded by the East Indian employees.

In March 2000, Williams hired Donna Perry as the new human resources manager for the Newark facility. Perry testified that Williams told her at her hiring interview that the production numbers at the Newark facility were low and “that was a big issue.” Williams also reported to her that the “ethnic makeup of the staff sometimes could be an issue.” Perry was aware that 85 to 90 percent of the staff were East Indian, and she noted that she “possibly” was told this at her initial interview. Perry stated that Williams had discussed with her “the lack of diversity in hiring, and [that] diversity is an important aspect of any human resources department.” She testified that Williams had expressed concern that temporary employees had complained about cliquishness among the East Indian production workers. When deposed, Perry asserted that Williams told her to “get a variety of people in age group, group-wise, racial breakdown . . . .”

Perry testified that Williams expressed concern about the staffing agency ADVO was using because it was primarily recruiting employees of East Indian national origin. Williams reportedly stated that the agency relied on referrals of people who were already working there, and they tended to be East Indian. Perry explained that this “staffing agency was an East Indian owned or operated agency.”

Perry also testified that Williams told her about a prior incident involving East Indian employees. Williams told Perry that years ago, when the production facility was located in Union City, a group of East Indian production workers had slowed down as a result of a working condition issue. Counsel asked Perry whether “[Williams] indicated to you . . . that her feelings that if there was any kind of group action by the East Indian workers on her watch, that the best way to deal with it would be prompt and strong discipline . . . ?” Perry responded, “Yes.”

The court's view of the (non)-disciplinary memo to the supervisor involved:

Neither Williams nor Perry recommended any discipline for Wright [the supervisor] regarding the incident and he was not disciplined. Perry did, however, write a memorandum dated July 19, 2000, and placed it in Wright’s file. The memorandum stated in relevant part:

“Although you deny the negative statements that your crew stated you said and also deny that you spoke to them with [anger] and used ‘curse words’, I am concerned that five employees were upset enough to walk off their jobs. Because of this I feel I need to emphasize our Harassment Policy to you so that we may avoid any situations, real or perceived, of this nature. [¶] Although our policy specifically addresses sexual and racial harassment, it also states that our workplace must be free of ‘undesirable, unprofessional behavior’ and that no associate should feel that their [sic] work environment is ‘intimidating or offensive’.”

Another fact relied on by the court to uphold the finding of intentional discrimination, shortly after the incident the company changed staffing companies which hired temporary workers, like the one involved in this incident. Unlike the prior company it was not East Indian owned. The result, "about 40 percent of the new hires from this agency were East Indians while previously 80 percent of the new hires had been East Indians. From December 1999 through and until December 2000, the percentage of East Indian workers making up the regular workforce at the Newark facility decreased from 85 percent to approximately 66 percent."

Although it is very hard to get what really happened from a cold trial record, especially as filtered through an adverse appellate opinion, still I am hard pressed to find many cautionary tales from this case, short of abdication to challenges by workers, which I know is ultimately both unworkable and unsound HR policy. Come hear us in San Diego, maybe some of my fellow panelists Corbett Gordon of Fisher & Phillips (Portland), Jeff Portnoy of Cades Schutte (Honolulu, assuming he is not in trial) and Paul Prather of Kiesewetter Wise (Memphis) can do better with it than I can.